Can a $5 latte really buy happiness?
Cut out your latte might be one of the most hated pieces of personal finance advice.
👋 Welcome to the latest issue of How To Money by Kate Campbell – the newsletter that talks about all those money things you wish you had learnt in high school.
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Dear Reader,
Cut out your latte might be one of the most hated pieces of personal finance advice.
It creates a visceral reaction in its recipients and evokes strong responses on both sides of the aisle.
I get it; I really do. On the one hand, the latte represents all those small purchases that add up and make it difficult for you to reach your financial goals. On the other hand, a latte represents a small but meaningful purchase that adds value to your day.
Of course, if we bought lattes non-stop, we’d have nothing left to save and invest at the end of the month, but that’s not the reality. I acknowledge that a lot of small cuts to our budget add up and can hinder our financial goals, but let’s think about it slightly differently.
Instead, I’d like you to consider the meaning behind the latte.
When I first started in finance as a naive 19-year-old, everything was new and overwhelming. I didn’t have a regular coffee-drinking habit; up till then, I rather liked a chai latte. But when older colleagues I looked up to in the office asked me if I wanted to grab a coffee, you can bet I was going to fit in by ordering a latte. I got to learn and ask questions outside of the office for the simple price of a coffee. Of course, I didn’t have to order anything, but having a warm drink in my hand just seemed to make conversation easier.
Later, that evolved into coffee walks with friends, coffee (more often tea) on the couch with family, and writing in cafes, beverage in hand.
To me, a latte represents connection.
As I explored in my book Buying Happiness, a lot of research shows us just how important connection is to our overall well-being.
In fact, when I asked our wider podcast community about some of the low-cost purchases that added the most value to their lives, coffee came up continuously. Whether it was buying a Nespresso machine to have a morning latte with their partner or providing an anchor point for weekend walks with friends, small purchases (like coffee) can play a big role in our daily happiness.
✨ Write down a list of your micro-joys
My challenge to you now is to write a list on your phone of small, inexpensive purchases that make you happy.
Now you’ve got this list, I want you to purposefully create room in your budget for these purchases.
Create a separate savings account, give it a fun name and automate a payment of $20 in a week (or whatever feels right).
Then, use this money freely to spend on small purchases that add joy to your days.
✅ What are your favourite micro happiness-boosting purchases? Let me know in the comments below ⬇️
P.S. Sometimes, I buy coffee on the way to work without really thinking about it. On these occasions, lattes don’t add as much joy to my life (as they normally do with friends) and could probably be stripped from my budget if needed.
P.P.S. If I ever start telling people to cut out the lattes, let me know!
Thanks for reading
Thanks for reading today’s issue of How To Money. If you enjoyed what you read, I’d really appreciate it if you could share it with a friend, family member, or colleague who you think might like it too.
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Buy a copy of my book, Buying Happiness: Learn to invest your time and money better through Booktopia, Amazon or order it through your local library.
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Love this!!!
Great article